On our main site we produced an article making predictions on the forthcoming Pre-Budget Report. Our material came from a number of Lambert Chapman personnel and the full text of their thoughts is included below. We would be delighted if you wished to add your own comments underneath.
Chris Harman
Colin Timms, Financial Secretary to the Treasury recently said ‘It is right that taxpayers pay their fair share of tax. However, there are a minority who continue to seek ways to avoid paying their share. This is unacceptable. It is unfair on the majority of taxpayers, undermines fiscal sustainability, and reduces funding for public services. This Government will not tolerate tax avoidance schemes or tax evasion in any form, and will act promptly to tackle both of these’.
From that statement which includes tax avoidance I must put as one of my top predictions that:
- HMRC will take the view that many things that are tax planning will, in HMRC view, be considered as tax avoidance and therefore many simple and standard tax planning actions will be disallowed.
Other predictions:
- Corporation Tax : Small Companies rate to stay at 21%. Main rate to stay at 28%.
- Income Tax : A 60% rate to be introduced for income above £250,000. Environmental issue ; People who commute to work in their car and who are provided with free parking by their employer will have a taxable benefit on the provision of the parking space unless they also transport a passenger to their workplace.
- Capital Gains Tax : The rate to increase to at least 25%. The Exemption to elect for a second home to be a Principle Private Residence (PPR) to be abolished. PPR to be exempt only up to a fixed level of gain and any PPR gain over that level to be taxed at a rate that is less than the full CGT rate.
- IHT : The £nil rate band to increase to £750,000. A 50% band on Estates over £5,000,000. Business Property Relief and Agricultural Property Relief to be capped.
- NIC : No changes.
- Stamp Duty : The £175,000 starting level for residential houses to be extended to £200,000 w.e.f 1/12/2009.
- VAT : The 15% rate will continue until 30th June 2010 from when it will be 20%. The reduced rate of 5% for domestic heating will be increased to 10% w.e.f 1st January 2010 (I must get my next lot of oil ordered!)
- Wealth Tax : A new tax which will be 0.25% on assets, anywhere in the world, owned by a U.K. domiciled resident where their Open Market Value at 31st December each year exceeds £5,000,000. The rate will be increased or the excess level will be reduced in the tax year during which people emigrate.
- The proposed alignment of our fiscal year to be moved to a calendar year and therefore inline with much of the world.
- Beer and spirit duties : The duties will remain the same but steps will be put in place to set minimum selling prices so that supermarkets can’t sell cheap alcohol.
- Road Fund Licence : Increases on ’unfriendly vehicles’. The lowering of the emission bands for ‘friendly vehicles’.
- Funding for the building of more Universities to start in 2013. This will be because more people will have to have a ‘degree’ before they can undertake their chosen work* and will also be seen as giving the Construction Industry a boost following on from the Olympics building work. Measures will be brought in so that ‘one man band’ and ‘labour only’ construction workers will have to be employees and not self employed if they are to work on any such projects.
- The ‘remittance basis’ for U.K. residents who are not U.K. domiciled will apply to those who have been U.K. resident for five of the last seven years (instead of 7 of the last 9 years).
- Long term unemployed without any qualifications will be offered a cash inducement to travel to interviews and jobs (for the first year of work). Those who have studied and worked will have to get on with it without any help).
I heard on the radio this morning that all new nurses will, by 2013 (funny that is after the Olympics!) have to have a degree before they can become a nurse. I know that they have to undergo learning and need a degree or a diploma to be a nurse (they can start nurse training with no qualifications), but, the radio report only mentioned a degree so is a diploma out of the window? Isn’t nursing a vocation? I can foresee other trades will be pushed towards having to have qualifications i.e a butcher needing something in the field of chemistry combined with biology!
Gill Philpott and the Tax Team
Capital gains tax rate to rise to 25% to cut the differential between income tax and capital gains tax which has in the last year led to tax payers seeking to tax events as capital rather than income
To assist the property market the retention of the £175,000 Stamp Duty Land Tax exemption
Introduction of anti avoidance legislation aimed at removing tax advantages of employee benefit arrangements
Another deferral on the introduction of the income shifting rules due to difficulties in drafting the legislation
A measure to penalise ‘fat cat’ city bonuses – perhaps in the form of a punative National Insurance Rate,
and of course the perenial favourites years measures to promote green issues and measures to penalise the drinkers and smokers and drivers of fuel guzzling cars
Something we would like to see but don’t think will be introduced profit averaging for all businesses and not just farmers and artists to help businesses even out profits, tax and therefore cashflow between the good and bad years.

Mike Carabine
Mike Carabine
The standard VAT rate is due to go back up to 17.5% from 1 January 2010. However I predict the increase will be delayed 1 or 2 months but will rise to 18% (possibly even as far as 20%).
Potentially reducing the range of supplies qualifying for VAT zero-rating, blaming EC legislation whilst increasing the amount coming into Treasury coffers.
More attacks on tax avoidance schemes.
Corporation Tax for small companies to rise to 22% as was meant to happen from 1 April 2009. Rates for large companies to continue to fall.
Nigel Whittle
Increase the Capital Gains Tax rate to 30%
Lisa Potter
I believe that Government will be playing their cards close to their chest. With an election around the corner they would be suicidal to make any radical announcements beyond those already in place without further risking their chances of being re-elected.
The one announcement to keep an eye out for will be the VAT rate from 1st January, I believe that this may be announced at a higher rate than the 17.5% previously in place. Regardless of what the rate is, businesses will once again suffer from the inconvenience of the administration burden as a result of the change and many will remain confused as to what income falls under what VAT regime.
I believe that the 50% higher rate will be fully implemented for forthcoming tax periods. As for corporation tax I would like to see some changes to the rate for smaller companies, larger company’s have benefited from decrease in rates whilst the smaller company rate has increased. In light of the current climate this should be addressed to assist those businesses that are in more need of the assistance.
Overall I think it will be a non-eventful Pre-Budget report based more on the protection of their re-election chances than changes to legislation that will lose them votes.
Richard Thomson
With the next election looming, I think they will be looking for increasing support from voters whilst trying to increase revenue, by delayed measures and targeting higher earners.
Therefore unlikely to increase VAT, Corp tax etc in short term.
Likely to have notional ‘feel good’ announcements:
- Gift to pensioners – extra winter payments, tax benefits etc.
- Revision of tax credits with increase to lower incomes.
- Further adjustment to ISA’s and encouragement of savings.
And will also have:
Increasing tax on wealthy – perhaps reducing the £150K 50% band.
Increasing NIC on high earners – increasing rate, upper band.
Focusing on Green issues and tax incentives, with additional tax charges for those not being green.
Increase to CGT rate of 18%, which is relatively low.
Revision to IHT to assist middle England – which as house prices have fallen, won’t be as dramatic as many claim.
and of course:
preventing Income shifting, introducing NIC on close company divi’s, increasing tax avoidance schemes etc.
I’ve been buying tickets for over 30 years and in that time I’ve come to consider that I might have been abused more as each year passes. I know how much I’ve paid as I have a collection of programmes including ticket stubs and I can tell you that a Wembley Empire Pool concert cost £4 a ticket in 1978 and a heck of a lot more these days. What I find really disconcerting is not the price of the ticket but the add ons that seem to increase in both value and number as time passes.
For: I’m no car enthusiast so for me the vehicle is designed to get one from A to B in the maximum of comfort. I am hopeful that the scheme produces increased orders and allows employment to be maintained within the car industry in the United Kingdom.
Against: I look at the car scrappage scheme as a classic car enthusiast, someone who is concerned for our environment and as a Tax Partner of Lambert Chapman LLP. The three don’t mix. I recollect we were told the car scrappage scheme was to boost the UK car industry and take older vehicles off the road in favour of newer, safer and potentially greener cars.
“You know where to find me, ….know where to find me, well I ask you is this the sort of behaviour we should expect from our Government ministers?”
As anyone who knows me will tell you, I am a typical male chartered accountant – I have been called “tight fisted”, “mean”, even “boring and unadventurous” – I prefer to call myself “prudent” and “cautious”, two words much used by our beloved (?) Prime Minister, particularly during his stint as Chancellor of the Exchequer.
Earlier this year Sir Michael Caine railed against the introduction of the 50% top rate of income tax by the Chancellor. “If the top rate goes beyond 50%, then I shall leave the UK” he was quoted as saying.
“These days we can’t see the wood for the trees when we take these decisions. Take Biggs as an example. When the Great Train Robbery took place the world was a very different place. Footage of the robbery shows that. Those boys took an awful lot of money and were merciless with the driver. Violent and horrific crimes were on the increase with people like Harry Roberts on the run after shooting a Policeman and Brady and Hindley on the loose. While I accept that Mr Biggs was not on the footplate I cannot forget the pictures of him sitting in Brazil posing and holding up a bottle of beer to the camera or his participation on songs with that Sex Pistols group – one somewhat unsavourily as I remember reading was to be called Cosh the Driver during the 1970’s. His disrespect to us all at that time alone, good laugh it may have been to him, is enough to keep him locked up. Many of us could not name the rest of the gang a lot of whom did serve out their sentences but we can remember Biggs. They would probably say good luck to him well done, and had he not given us the proverbial 2 fingers I might be more compassionate towards him.”
3 games down, 9 points and top of the League. Who’d have believed it? Not me for sure, 1 week down 25% towards the safety net points total and Birmingham City at home on Saturday. Last time they were up they took 6 points from us with a wicked 40 yarder that could have gone anywhere and a post Carling Cup win embarrassment by 4-1 at St Andrews. In that period we approached games with arrogance (having won a cup) and played without any at all – this time I hope we keep our feet securely on the ground.
Here come the girls!
Sean acted as a marshal at Checkpoint 1, “I was lucky enough to be a marshall on the first checkpoint with Tricky which meant that we had to be at the Discovery Centre by 4.15 am ready for our instructions. When I arrived Tricky already had the map showing our directions to the checkpoint so after signing in, we got in the car and left.
Nick and Nigel were positioned just before check point 3 at Felsted. Nick’s thoughts were, “When the clock went off at 3.45 I looked out of the window to see thick fog and it remained for most of the event. Having visited the office to collect a banner I then put it up at Felsted School the half way point and was ready at my appointed rendezvous time of 5.15 for 5.30 start only to find no one else was there! All of a sudden cars arrived from all directions and we, Nigel and I, were issued with our marshalling jackets and shown to our spot by the Felsted Water Tower.
